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US Cities Most Exposed to a Trump Trade Shock

Some smaller US metros are most vulnerable to shifts in shipments of export cargo and import cargo in international trade.

US Cities Most Exposed to a Trump Trade Shock

In both rhetoric and action, President Trump is already drastically reshaping US trade policy.

In his inaugural address, President Trump’s declaration was clear: “From this day forward, it’s going to be only America first, America first. We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs. Protection will lead to great prosperity and strength.”

Moving from inaugural poetry to governing prose, the president issued an executive action that withdrew the United States from the Trans-Pacific Partnership, a 12-country trade agreement that took eight years to negotiate. Following that came days that have been crowded with announcements, twitter firestorms, and diplomatic skirmishing about the new administration’s plans to perhaps impose a border tax and renegotiate NAFTA with Canada and Mexico.

Yet for all its national and global implications, an “America first” economic policy is also a matter of significant import for the nation’s local patchwork of cities, small towns, and rural areas.

Trade is generally regarded as a national issue, but it is underpinned by local collections of firms that often concentrate together to form industrial clusters. This means that changes in federal trade policy can have large implications for individual communities, whose reliance on trade can vary widely by dint of the tradability of their local industry mix and overall global orientation.

In view of this relationship, it is worth examining the geography of export reliance among US metro areas. Brookings has accomplished this through its Export Monitor, which allows for a unique bottom-up look at America’s export economy, and how different parts of the country will be exposed to changes in trade policy.

What do these data show? In terms of overall volume, the nation’s major regional economies lead the way. New York, Los Angeles, Houston, Chicago, Dallas, and Seattle are trading giants, each exporting more than $50 billion annually in goods and services, and together accounting for 25 percent of national exports.

And yet large cities, while certainly global hubs of trade and commerce, are not the parts of the country most reliant on exports as a driver of economic growth and jobs. Rather, export intensity—measured as the export share of GDP—is highest in smaller energy- and manufacturing-oriented metros. At the extreme end, over half of the economy in Columbus, Indiana is driven by exports, largely due to its machinery manufacturing cluster. Smaller production centers in the Midwest and South also join this list, along with oil and chemical exporters in Louisiana and Texas.

Among the 100 largest metro areas, the most export-dependent economies tend to be major centers of advanced industries, reflecting US advantages in aerospace (Wichita and Seattle), automotive (Detroit and Youngstown), electronics (Portland, Oregon, and Ogden, Utah), and energy production (Baton Rouge, New Orleans, and Houston). In all of these economies, exports account for at least 15 percent of GDP and tens of thousands of jobs.

In the least trade-intensive parts of the country, exports account for less than six percent of economic output. These metro areas tend to be in the south and west, and rely more on business services and tourism and travel—two less-tradable portions of the US economy.

As to what these patterns say about the nation’s trade involvement at a moment of flux, a few things jump out. For one thing, while trade burns as a contentious national issue, it ultimately remains a local and regional economic activity. Trade involves millions of workers in hundreds of real and varied places, and often drives crucial local commerce. The coming trade debates will not be remote from America’s metros and communities.

At the same time, the data underscores that no clean political divide separates trade-oriented counties from others. For example, a look at the nation’s aggregate 2015 export volume shows that, while 58 percent of exports emanated from counties that voted for Hillary Clinton, fully 42 percent shipped out of counties won by Trump.

Even more strikingly, while exports made up 10 percent of the economic output in Clinton counties, the comparable figure was 13 percent for Trump counties, meaning that the latter have a special stake in the tricky matter of changing the nation’s terms of trade. Because Trump counties are on average more export-intensive than Clinton counties, they will be especially exposed to the ramifications of changes in current trade patterns.

The clear takeaway: President Trump’s campaign to remake the nation’s global trade relationships will not be a remote or academic affair—it will have real implications for regional economies. And while the benefits or disruptions of change will affect some places more than others, all of America—big-city metro and small-town or rural; red and blue; coastal or in-between—has a stake in what happens.

Joseph Parilla is a fellow and Mark Muro is a senior fellow and policy director at the Brookings Institution’s Metropolitan Policy Program. This article originally appeared here.

Workers need more help adjusting to employment patters impacted by shipments of export cargo and import cargo in international trade.

Where Global Trade Has the Biggest Impact on Workers

President-elect Donald Trump’s deal to save the jobs of 730 workers at the Carrier plant in Indiana is a first attempt to deliver on his forceful campaign rhetoric to help workers and communities dislocated by trade. Rather than an unsustainable strategy that cuts deals firm by firm, though, the Trump administration should reform and expand the federal government’s trade adjustment policies to support a much wider swath of trade-displaced workers.

Economic theory acknowledges that global trade offers benefits that should be celebrated and exacts costs that cannot be ignored. As the Council on Foreign Relation’s Edward Alden details

in a new book, this reality led to the creation of the U.S. Department of Labor’s Trade Adjustment Assistance (TAA) in 1962.

Trade Adjustment Assistance is the country’s signature support program targeted to workers affected by global competition. In fiscal year 2015, about 58,000 workers became eligible for TAA’s benefits and services, which include job training and job-searching assistance. Since its inception, the TAA program has certified nearly 4.9 million workers and served approximately 2.2 million workers.

The program’s Consolidated Petitions Database, which has been geocoded and provided online by Public Citizen, offers an estimate of the number of workers at trade-affected companies, including both layoffs and employment reductions through attrition. Analysis of this database, which includes records dating back to 1994, reveals three core findings about the geography of trade dislocation.

Trade adjustment assistance touches nearly every community in the United States, both large cities and outlying areas. One-half of TAA-certified Americans lives and works in the nation’s 100 largest metropolitan areas. Since 1994, the top 10 metro areas in terms of total TAA-certified workers include the largest metros in the country—New York, Los Angeles, Chicago, Dallas, Philadelphia, and Boston. Also in the top 10 are export-intensive midsized metros like Detroit, Charlotte, and Portland. El Paso—on the U.S.–Mexico border—rounds out the top 10. Small metro areas—those with populations between 50,000 and 500,000—house 21 percent of TAA-certified workers while micropolitan areas (those with populations under 50,000 residents with a core city of at least 10,000) and rural areas account for a combined 29 percent of TAA-certified workers.

As a share of the overall employment base, TAA-certified workers are most concentrated in rural and micropolitan areas. Although those areas of the country constitute a minority of overall TAA-certified workers, the effects of trade are certainly felt most acutely there. Consistent with previous research, the most intense effect of trade displacement is in smaller communities in the Midwest and South. Other high concentrations of displacement cluster in the Carolinas, Tennessee, Pennsylvania, and parts of Ohio and Michigan that depend on manufacturing industries that are subject to global competition and technological automation.

The areas of the country most affected by trade tended to vote for Trump. Approximately 90 percent of the communities most affected by trade voted for Trump, while only 72 percent of those least affected did so. That trade-affected communities leaned toward Trump squares with previous research showing that regional labor markets facing rising import competition pushed voters toward the president-elect.

This analysis points to a few takeaways that should be considered as policy debates unfold.

First, all communities are home to export industries and, to varying extents, are affected when those industries lose out to global competition. This phenomenon is surely felt most acutely in smaller, outlying communities, but it is a challenge shared by big cities, small towns, and rural areas alike. Yet, closing regions and workers off from global competition is unlikely to be a successful counterstrategy. The most trade-displaced metros still tend to be export-intensive. Simply raising tariffs or backing out of trade deals could raise the prices of intermediate inputs for existing export industries in these markets, further degrading their global competitiveness and spurring further job loss and economic distress.

Yet business as usual will not suffice. The TAA program, as it is currently deployed, has not been particularly effective in helping displaced workers. Its scale is insufficient relative to the scale of displacement. Indeed, MIT’s David Autor and colleagues find that most displaced workers rely on Social Security and disability benefits rather than the retraining resources provided by TAA.

A new adjustment agenda is required that arms these workers and communities with the resources to help them get back on their feet. Reforming the TAA program, and combining it with wage insurance, more comprehensive training assistance, and even resources that help workers move to regions with greater economic opportunities could be part of a broader Trump administration response. Getting serious about helping workers dislocated by trade would be a great outcome of the Trump years.

Joseph Parilla is a fellow and Mark Muro is a senior fellow and policy director at the Brookings Institution’s Metropolitan Policy Program. This article originally appeared here.